Ministers sink 'pensions life boat'

Ministers have defeated a Conservative-led amendment to the pension bill, rejecting calls to guarantee more financial help to people whose occupational pension schemes have collapsed.

The government defeated the cross-party amendment by 22 votes, after pensions minister James Purnell made concessions to expand the Financial Assistance Scheme (FSA).

The FSA will now cover 8,000 more savers, including those whose schemes wound up between January 1st 1997 and April 5th 2005.

Leading cross-party calls to expand the FSA, the Conservatives had proposed a £600 million "lifeboat fund" to top-up benefits to 90 per cent of the expected pension package, to be funded by a Treasury loan.